Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting (unaudited) 2015-2016
This document provides summary information on the measures taken by the Office of the Commissioner of Official Languages (OCOL) to maintain an effective system of internal control over financial reporting, including information on internal control management, assessment results and related action plans.
Detailed information on OCOL's authority, mandate and program activities can be found in the 2015–16 Departmental Performance Report and the 2016-17 Report on Plans and Priorities.
2. Departmental system of internal control over financial reporting
2.1 Internal control management
OCOL has a well-established governance and accountability structure to support organizational assessment efforts and oversight of its system of internal control. An organizational internal control management framework, approved by the Commissioner, is in place and includes:
- Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;
- Values and ethics;
- Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and
- Monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Commissioner and organizational senior management and, as applicable, OCOL’s Audit and Evaluation Committee (AEC).
The AEC provides advice to the Commissioner on the adequacy and functioning of the OCOL's risk management, control and governance frameworks and processes.
2.2 Service arrangements relevant to financial statements
OCOL relies on other organizations for the processing of certain transactions that are recorded in its financial statements as follows.
- Public Works and Government Services Canada centrally administers the payments of salaries and the procurement of goods and services in accordance with OCOL’s Delegation of Authority, and provides accommodation services.
- Public Works and Government Services Canada provides OCOL with a financial system platform—the Common Departmental Financial System (CDFS)—to capture and report all financial transactions; and
- Public Works and Government Services Canada provides OCOL with an employee pay administration service to capture all pay transactions.
3. Organizational assessment results during fiscal year 2015-2016
During 2015–2016, the Office of the Commissioner of Official Languages completed design and operating effectiveness testing in various key control areas.
3.1 Design effectiveness testing of key controls
In 2015–2016, OCOL successfully completed design effectiveness testing of procurement, supplier payment, salaries, pay administration, travel credit cards, acquisition card management, budgeting, financial resource management, financial close and reporting, and interdepartmental settlements as key business processes. Design effectiveness testing was also conducted about these processes.
3.2 Operating effectiveness testing of key controls
In 2015–2016, OCOL successfully completed operating effectiveness testing of the general controls listed in 3.1. Tests were conducted at the end of the fiscal year, and the required corrective actions will be implemented in 2016–2017. It should be noted that some of OCOL’s key controls were assessed independently and considered to be acceptable or more acceptable (strong), except for one sub-process regarding travel credit cards, which was assessed as an opportunity for improvement.
Following the operating effectiveness testing at the end of the fiscal year, OCOL will decide which corrective action will be taken in 2016–2017.
4. Organizational action plan
4.1 Progress during fiscal year 2015-2016
During 2015–2016, OCOL continued to make significant progress in assessing and improving its key controls. The following table summarizes the organization’s progress based on the plans identified in the previous fiscal year’s annex.
|Element in previous year’s action plan||Status|
|Design and operating effectiveness testing||Design effectiveness tests completed and remediation of design deficiencies advanced.|
|Operating effectiveness testing of key controls||Operating effectiveness testing and remediation advanced. In addition, major modifications were made to the delegation of financial signing authorities and signature cards. Minor modifications were also made, particularly in terms of travel expenditures and hospitality and event expenditures.|
|Ongoing monitoring plan||OCOL is now conducting ongoing cyclical monitoring for all of its processes, except for the general IT controls managed by OCOL. The next assessments are scheduled for 2017–2018. However, a lot of work has to be done in 2016–2017, particularly in terms of taking corrective action on the processes assessed in 2015–2016.|
4.2 Status and action plan for the next fiscal year and subsequent years
|Key control areas||Design effectiveness testing and remediation||Operational effectiveness testing and remediation||Ongoing monitoring rotation|
|Procurement and supplier payment||2015-2016||2015-2016||2018-2019|
|Salaries / pay administration||2015-2016||2015-2016||2018-2019|
|Delegation of financial signing authorities for disbursements (signature cards)||2014-2015||2014-2015||2017-2018|
|Asset and inventory management||2014-2015||2014-2015||2017-2018|
|Hospitality and events||2014-2015||2014-2015||2017-2018|
|Business travel credit cards||2015-2016||2015-2016||2018-2019|
|Manage acquisition cards||2015-2016||2015-2016||2018-2019|
|IT general controls under organizational management||2017-2018||2017-2018||2017-2018|
|Budgeting and financial resource management and monitoring||2015-2016||2015-2016||2018-2019|
|Financial close and reporting||2015-2016||2015-2016||2018-2019|